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CITFED BANCORP ANNOUNCES RECORD FIRST QUARTER EARNINGS; CORE EARNINGS UP 20.7 PERCENT

 DAYTON, Ohio, July 26 /PRNewswire/ -- CitFed Bancorp, Inc., (NASDAQ-NMS: CTZN), the holding company of Citizens Federal Bank, F.S.B., today announced record first quarter earnings of $4.0 million, or $0.94 per share, for the three months ended June 30, 1993. A non- recurring gain resulting from a change in accounting for income taxes increased first quarter earnings by $0.35 per share. In addition, core earnings increased 20.7 percent to $2.5 million as compared to $2.1 million, or $0.49 per share, for the first quarter ended June 30, 1992.
 "Fiscal 1994 is off to a strong start," commented Jerry L. Kirby, president and chief executive officer. "Mortgage loan originations and consumer banking activities triggered the corporation's growth in core earnings. Going forward, our marketing plans are focused on establishing Citizens Federal as a full-service consumer bank with enhanced consumer, small business and mortgage-related credit products. This strategy, combined with continued control over our operating costs and the bank's emphasis on fee-based products, should benefit future operating results."
 For the three months ended June 30, 1993, CitFed's net interest margin declined to 2.88 percent, compared with 3.02 percent for the same period last year. However, net interest income amounted to $12.0 million for the quarter, compared with $11.9 million for the same quarter in fiscal 1993. This was mainly due to the ratio of average interest-earning assets to average interest-bearing liabilities increasing to 103.2 percent for the three months ended June 30, 1993 as compared to 99.7 percent for the three mo
 CitFed Mortgage Corporation of America, the bank's wholly owned subsidiary, closed mortgage loans totalling $472.6 million during the first quarter of fiscal 1994, compared with $236.6 million in the same period last year. The increase, due to low interest rates, reflects increased home purchases within Central and Southwestern Ohio as well as increased home mortgage refinancings.
 CitFed Mortgage is one of the area's largest mortgage lenders. During fiscal 1993, the Mortgage Company began developing mortgage loan correspondent relationships with certain financial institutions, mortgage companies and brokers to increase its loan servicing portfolio in a cost effective manner. Mortgage loans purchased from correspondents totalled $112.4 million for the three months ended June 30, 1993, as compared to $14.6 million for the same quarter last year. At June 30, 1993, CitFed serviced $3.5 billion in mortgage loans, of which $1.9 billion were for other investors.
 At June 30, 1993, non-performing assets were $24.0 million, or 1.36 percent of total assets as compared to 1.39 percent at March 31, 1993. The bank's non-performing asset levels remain substantially below the industry average.
 Consumer banking fee income increased 12.9 percent to $1.2 million in the first quarter, up from $1.1 million for the same quarter last year. The bank has been focusing most of its marketing efforts on increasing the volume of lower cost transaction accounts. Checking, savings and money market deposits grew 14.0 percent to $595 million from $522 million one year ago.
 The bank continues to exceed all current and fully phased-in minimum regulatory capital requirements. Total stockholders' equity stood at $112 million, or 6.34 percent of assets, at June 30, 1993. Total assets amounted to $1.8 billion, compared with $1.7 billion one year ago.
 Commenting on the bank's nonrecurring earnings gain, Kirby explained that the Financial Accounting Standards Board, which sets national standards for accounting and regulates the components of generally accepted accounting principles, issued Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes." This pronouncement changes the rules for accounting for income taxes. Previously, thrift institutions were not able to deduct provisions from possible loan losses until a loss was actually incurred and the loan was charged-off. The new rule puts thrift institutions on parity with commercial banks and allows provisions to be deducted when they are recorded. The new rule also allowed the bank a one-time recapture of the loan loss provisions which the bank had not been allowed to deduct over the past four years, resulting in a gain of $1.5 million for the three months ended June 30, 1993.
 "We're pleased with this change in accounting standards because now thrifts and banks are treated equally with respect to accounting for income taxes," said Kirby.
 The bank reported that its trust assets were $341.6 million at June 30, 1993, as compared to $270.5 million one year ago. Kirby stated, "we are well positioned to meet the needs of customers with investment products and services through our Trust Department."
 In other news, Citizens Federal notified the holders of its Euro- notes that the bank intends to call these notes at par on Sept. 13, 1993. The outstanding principal balance of the floating-rate LIBOR based Euro-notes is $67.4 million with an interest rate floor of five percent. The bank intends to replace the borrowing with lower-costi Federal Home Loan Bank advances.
 At its annual stockholders meeting on July 23, 1993, the corporation announced its first regular quarterly cash dividend of five cents per share payable Aug. 31, 1993 to stockholders of record on Aug. 16, 1993.
 CitFed Bancorp, Inc. is the holding company of Citizens Federal Bank, F.S.B., the largest financial institution headquartered in Dayton, Ohio. The bank operates 21 retail offices in a five-county area. The bank's subsidiary, CitFed Mortgage Corporation, operates six mortgage origination offices in Dayton, Cincinnati and Columbus, Ohio.
 CitFed Bancorp, Inc.
 Highlights
 (in thousands except for share data)
 Balance Sheet
 June 30, June 30,
 1993 1992
 Total Assets $1,765,751 $1,698,366
 Loans Receivable, net 936,828 832,709
 Mortgage-backed securities 593,569 556,460
 Cash and cash equivalents 27,248 52,406
 Investment securities 114,741 145,746
 Deposits 1,235,980 1,312,905
 Borrowings 399,697 267,350
 Stockholders' Equity 111,969 101,041
 Shareholders' Equity/Assets 6.34 pct. 5.95 pct.
 Tangible Capital/Assets 5.29 pct. 4.71 pct.
 Book Value per Share $27.06 $24.43
 Market Closing Price $20.50 $12.00
 Price/Earnings multiple 5.45x 6.12x
 Operating Data
 For the Three Months Ended
 June 30, June 30,
 1993 1992
 Total Interest Income $29,280 $32,860
 Total Interest Expense 17,324 20,931
 Provision for Loan Losses 700 699
 Other Income 3,651 3,221
 Other Expense 10,562 10,490
 Net Income 3,992 2,065
 Earnings per share before
 cumulative effect of change
 in accounting principles .59 .49
 Net Income per share .94 .49
 Net Interest Margin 2.88 pct. 3.02 pct.
 Return on average equity 14.52 pct. 8.26 pct.
 Return on average assets .92 pct. .48 pct.
 -0- 7/26/93
 /CONTACT: Diana Schoenberger of CitFed Bancorp, Inc., 513-229-8319/
 (CTZN)


CO: CitFed Bancorp, Inc. ST: Ohio IN: FIN SU: ERN

BM -- CL023 -- 5853 07/26/93 16:08 EDT
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Date:Jul 26, 1993
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